Australia: Kirk Decision Gives Clarity to Employers' Responsibilities Under NSW OH&S law

Occupational Health and Safety Insights

NSW employers are now in a better position to argue, where appropriate, that it is not reasonably practicable to comply with occupational health and safety obligations. The allegations of breaches against an employer must be fully identified by the prosecutor in any prosecution under the OH&S Act. The onus, however, will remain on NSW employers to demonstrate why compliance is not reasonably practicable.

In Kirk v Industrial Relations Commission [2010] HCA 1, the High Court was highly critical, in a 6-1 majority decision, of the approach of both the NSW Industrial Court and WorkCover NSW. In particular, the Court revises the way the Occupational Health and Safety Act 1983 (NSW) and its current equivalent (OH&S Act) are interpreted, and confirmed that there are avenues for appeal outside of the NSW Industrial Court.

This article explores the outcome of Kirk, and what it means for employers in NSW.

The facts

The appellant, Kirk Group Holdings Pty Ltd was the owner of a farm in NSW. Mr Kirk was a director of the company but took no active role in running the farm because of lack of farming experience and his poor health. He left the daily operation of the farm to Mr Graham Palmer, employed as farm manager.

In March 2001, Mr Palmer intentionally drove a vehicle owned by the Kirk Group off a formed road and down the side of a hill at the farm. The vehicle overturned and Mr Palmer was killed.

Purported duties under the OH&S Act and the offences alleged to have been committed

WorkCover NSW prosecuted Mr Kirk and the Kirk Group for offences relating to obligations imposed by sections 15 and 16 of the OH&S Act. Although the 1983 Act has since been repealed, the current Act is in the same form.

Section 15(1) of the OH&S Act (s 8(1) of the current Act) says:

"Every employer shall ensure the health, safety and welfare at work of all the employees."

Section 16(1) (s 8(2) of the current Act) further states that:

"Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work."

Section 53(a) of the Act (s 28 of the current Act) provided a defence however, where:

"it is not reasonably practicable... to comply with the provisions of this Act"

Importantly, the charges as pleaded by WorkCover merely restated the above obligations, concluding that the Kirk Group failed to comply. It was alleged by WorkCover that the Mr Kirk and the Kirk Group placed its employees at risk of injury and failing to ensure non-employees were not exposed to risk of injury. WorkCover did not specify what measures should have been taken to avoid such breaches. This reflected the traditional approach of the NSW Industrial Court that an employer has an absolute duty requiring it "to guarantee, secure or make certain" workplace safety.

The decision at first instance

At trial, Walton J relied on previous authorities in asserting that prosecutions for breaches of sections 15 and 16 of the OH&S Act do not need to refer to the particular measures that should have been adopted by the employer. Rather, all that must be shown is that an employer has failed in its duty to remove general risks to health and safety.

If the Kirk Group wished to rely on a defence under section 53 of the OH&S Act, Walton J asserted it would need to establish that "no reasonably practicable measures, of any kind... could have been addressed to the type of risk." He subsequently identified risks relevant to the use of the vehicle, and concluded that it was reasonably practicable for those risks to have been eliminated.

Walton J consequently found against the Mr Kirk and the Kirk Group for breaches of sections 15 and 16 of the OH&S Act.

The High Court's view of sections 15 & 16 of the OH&S Act

The majority took particular exception to Walton J's judgment, noting:

"... his Honour's reasons disclose a wrong understanding of what constituted an offence against ss 15 and 16 and how the defence under s 53(a) was to be applied in proceedings for such an offence. His Honour did not appreciate that no act or omission on the part of the Kirk company had been charged. To the contrary, his Honour accepted the proposition that the prosecutor is not required to demonstrate that particular measures should have been taken to prevent the risk identified"

In particular the High Court noted that the failure of the prosecution to actually state what measures should have been taken by Mr Kirk and the Kirk Group to prevent the incident made establishing a defence under section 53 impossible as it could not answer with particularity why such measures were not reasonably practicable.

The High Court's interpretation here is more consistent with occupational health and safety legislation in other States where the employer's obligation is limited to taking practicable measures. By requiring the prosecution in NSW therefore to state what an employer should have done in any given circumstance, employers are thereby better placed to answer why such measures are not reasonably practicable.

The Industrial Court is not a 'one stop shop'

Having already torn up years of precedent, the High Court was not yet finished. To put the matter beyond doubt, the majority clarified that not all decisions of the Industrial Court are beyond review.

The Court was particularly focusing on s 179 of the Industrial Relations Act 1996 (NSW) (IR Act), which states any decision of the Industrial Court:

"is final and may not be appealed against, reviewed, quashed or called into question by any court or tribunal."

This "privative provision" is purportedly extended by section 179(5) of the IR Act, which states the above exclusion applies to any proceedings brought in a court or tribunal for any relief or remedy. It does not apply however to an appeal lying to the Full Bench of the Industrial Court.

Mr Kirk and the Kirk Group appealed against their convictions to the Full Bench of the Industrial Court, where the appeal was dismissed.

Mr Kirk and the Kirk Group then appealed to the NSW Court of Appeal, where all parties accepted the Court of Appeal could exercise a supervisory function over inferior courts and tribunals in respect of jurisdictional errors - that is, a decision which the inferior court or tribunal did not in fact have the power to make. The Court of Appeal held however that Mr Kirk and the Kirk Group failed to show how the Industrial Court and the Full Bench committed a jurisdictional error, and once again the appeal was dismissed.

That was not the end of the matter however, as Mr Kirk and the Kirk Group pinned its hopes on an appeal to the High Court. Reinforcing the comments of Chief Justice Spigelman in the Court of Appeal, the majority of the High Court asserted that section 179 of the IR Act, interpreted correctly, cannot remove the ability of State Supreme Courts to supervise the jurisdiction of inferior courts and tribunals. This was noted to be a defining characteristic of the State Supreme Courts under State constitutions, and the NSW State Parliament was said to be unable to divest the NSW Supreme Court of this characteristic.

The upshot was that the NSW Court of Appeal and the High Court retain power to hear an appeal from decisions of the NSW Industrial Court, notwithstanding section 179 of the IR Act, where the decision is alleged to have been one the Industrial Court did not in fact have the power to make.

The consequences of the Industrial Court's erroneous understanding of sections 15 & 16 of the OH&S Act

The Industrial Court's systematic misapplication of sections 15 and 16 of the OH&S Act, according to the High Court, constituted a jurisdictional error. This was because no act or omission was specified as to why those sections had been breached. The result? Any decision made by the Industrial Court on such a premise is one which it has no power make.

In addition, the prosecution had called Mr Kirk as a witness at trial, albeit with his consent, in breach of "an absolutely fundamental rule" of criminal evidence law in NSW. The High Court determined that this also constituted a jurisdictional error vitiating against the legitimacy of the Industrial Court's decision.

Accordingly, Mr Kirk and the Kirk Group finally succeeded in having the decisions of the Industrial Court, the Full Bench and the Court of Appeal set aside.

Where to from here?

Kirk potentially represents a major shift in the way OH&S laws are applied in NSW. Whereas a defence under section 53 of the OH&S Act was near impossible to establish under the Industrial Court's previous interpretations, the High Court has levelled the field whereby WorkCover NSW will now have to nominate with some precision what the employer should have done. However, the onus will remain on the employer to demonstrate why this was not reasonably practicable.

Moreover, Kirk shows that although privative clauses such as section 179 of the IR Act may appear to prevent a right of appeal, an appeal will still be available where a decision is outside the jurisdiction of the relevant court or tribunal. Accordingly, the NSW Court of Appeal cannot be divested of its supervisory role over inferior courts and tribunals.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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